28. Telegram From the Embassy in Uruguay to the Department of State1

165. Please pass following message to President.

“Dear Mr. President:

For last four days we have been going through hectic merry-go-round typical of Latin American economic conferences which must be seen to be believed. There have been four committees at work each of which has split into two or three subcommittees and they have been considering not only the basic act of Punta del Este to which there have been submitted 79 written amendments, but also 71 other resolutions covering just about every subject under the sun. Decisions made in subcommittee one day are reversed the next and then changed further by full committee. This is same process we went through at Buenos Aires economic conference of 57 but then it took over three weeks compared to ten days for this conference.

Daylight is now appearing and reports of working committees should hopefully be completed late tonight, Saturday, reproduced on [Page 57]Sunday and be considered by general committee of heads of delegations beginning Monday. Results generally follow very closely substance of US draft but with considerable language changes so that each nation can have something it can call its own.

There have only been two points of major substantive importance, the composition of the group of experts and a statement regarding scope of immediate US assistance. Argentina attacked original group of experts as US attempt to infringe sovereignty of Latin Americans. This effectively tied our hands so we backed off, said this was matter for Latins to settle and told our friends among smaller countries that we would favor strongest set-up they could get. Result was small country revolt against Argentina which eventually found herself completely alone. Then came final compromise which is practically identical in substance with our original proposal except that group increased from seven to nine and provision for chairman eliminated. Specific provision also made for use of panels of three so that committee can work on as many as three country plans at once. We had envisaged just such a procedure for our committee of seven.

Problem of US commitment for immediate assistance proved more difficult. This was Uruguayan idea, specifically that of President Haedo whose year in office ends in March and who wants a monument to his term of office. Uruguayan actions have taken on color of pure blackmail and even led to Haedo press statement that Uruguay would withdraw from conference if they could not get satisfaction. They started with proposal that US agree to commit one billion dollars to emergency projects in Latin America between now and end of year. Figure apparently picked because there was US commitment of $500 million at Bogota and this conference at least twice as important as Bogota. They rounded up support from El Salvador, which has behaved poorly here, Bolivia, Haiti, Paraguay and Ecuador although none of others would be problem without Uruguayan push. We said no and negotiated indirectly with Uruguayans for two days using Argentina, Chile, Mexico and El Salvador as go-betweens at various times. Finally I met for two hours this afternoon with Uruguayan Finance Minister and reached agreement which I hope will stick during committee consideration tonight. Substance of agreement is general statement on US willingness to help in short-term projects followed by reference to your message to conference regarding one billion dollars from all US sources in first year of Alliance. There is also statement that US will take prompt action (pro or con) on projects submitted during next sixty days by countries in emergency difficulties. There is understanding that this means only smaller countries and specifically does not include Argentina, Brazil or Mexico. In practice it should mean assignment this fall of about $10 million to Uruguay for schools, health centers and road building. Haedo at one time sent me [Page 58]word that his real price was $20 million but I am sure $10 million will be ample. This whole negotiation was disagreeable in the extreme but Uruguay as host country was in position exert pressure and chose to do so. I imagine part of it may have been Haedo personal pique at your decision not to attend conference.

Cuban resolutions have taken time to handle but have not been serious problem. They have only succeeded in getting in two or three bits of objectionable language which we shall remove during general committee consideration.

Information report was also a problem since experts’ draft of general principles was poorly written, objectionable to US and full of political statements which gave Cubans fine opportunity for numerous speeches on political motivation of conference. Final results, however, are satisfactory and meet fundamental US objectives.

In short, conference is proceeding about as we expected roughly on schedule, although Uruguayans today were talking of closing up Thursday instead of Wednesday. Result should be fully satisfactory document and enthusiasm from all sides, but leaving all concerned with hard and continuing task of converting Alianza into concrete action. Final Senate action Monday on foreign aid would be substantial added attraction to conference windup.

Faithfully yours,

Douglas Dillon
Sparks
  1. Source: Department of State, Central Files, 371.8/8-1361. Secret; Priority; Eyes Only. Received in the Department at 7:15 a.m. August 13.